Clothing rivalries Men's Wearhouse and Joseph A. Banks are at it again.
Joseph A. Banks Clothiers Inc. said no to a bid on Monday from Men's Wearhouse to buy them for nearly $1.5 billion. Jos. A. Bank asserted the offer from Men's Wearhouse was too small for them.
The amount "significantly undervalued the company and its near and long-term potential and was not in the best interest of the Company's shareholders," Jos. A. Bank Chairman Robert Wildrick said in a statement obtained by Businessweek. Wildrick said the company will consider alternative deals from other sources.
Men's Wearouse responded to the rejection and said in a statement they will do all they can to coax Jos. A. Bank into a takeover.
The company is "continuing to carefully consider all of our options to make this combination a reality, including nominating director candidates at Jos. A. Bank's next annual meeting of shareholders."
Anthony Michael Sabino, a professor at St. John University's business college, told Reuters the issue won't be easily resolved.
"I expect this tug of war to persist for some time," he said.
Men's Wearhouse tried to buy Jos. A. Bank before. Under pressure from its largest investor, Eminence Capital LLC, the company in November offered $55 a share for Jos. A. Bank, Reuters reported. But that came only after Jos A. Bank out of nowhere tried to buy Men's Wearhouse the month before.
Jos. A. Bank, the smaller of the two companies, offered Men's Wearhouse $2.3 billion in October, an amount the Wearhouse said they were insulted by.
"Men's Wearhouse believes the Jos. A. Bank unsolicited and inadequate proposal is a highly opportunistic attempt to exploit a temporary dislocation in the stock price of Men's Wearhouse in order to deprive Men's Wearhouse's shareholders of the intrinsic value of their investment," Bill Sechrest, the company's board director, said in a statement obtained by Businessweek.
"Each company is stubbornly holding on to its independence," Sabino told Reuters.
